Method and system for computer-implemented trading of new issue debt securities

ABSTRACT

A computer-implemented method and system for trading of debt securities (bonds), where multiple dealers participate and compete on a single platform ( 100 ). Dealers and investors have respective interfaces ( 250, 230 ) for communicating. In one aspect, dealers announce new debt security issues ( 400 ), the investors communicate an indication of interest (IOI) ( 500 ) in purchasing the new debt security issues, and the issues are allocated to the investors. In another aspect, issues from multiple dealers are made available to investors on a secondary trading market in a searchable format ( 1000 ). In response to price inquiries sent by the investors ( 1200 ), the dealers provide offers ( 1300 ) which are briefly held and released to the investor concurrently to allow the investor to consider all offers together. In another aspect, the dealers post bid and offer terms for actively traded issues ( 1700 ) that are updated in real-time to avoid the need for the inquiry procedure.

This application is a continuation of U.S. application Ser. No.10/026,358 filed Dec. 24, 2001 which claims the benefit of U.S.provisional patent application No. 60/257,807, filed Dec. 22, 2000, andincorporated herein by reference.

BACKGROUND OF THE INVENTION

This invention relates generally to a computer-implemented method and asystem for enabling investors to buy new issue debt securities, alsoknown as bonds, from multiple dealers.

Conventionally, bond trading has been performed using three differentmethods. First, the vast majority (about 99.75%) of bond trading occurswith voice-based discovery and trading, also known as an auction system.With this approach, dealers and investors gather in one location tovocally offer and accept various prices and terms for different bonds.Multiple investors, typically institutional investors, can select a bidfrom competing dealers. This process suffers obvious disadvantages inthat the number of investors and dealers that can be involved islimited. Additionally, a clerk must manually enter information regardingthe trades after the fact, which is an error-prone procedure.

Second, a cross-matching system has been used, where anonymous buy andsell offers that are entered are matched by a broker. This approach hasthe disadvantage that the investors and dealers cannot choose to dealwith a specific known party. For example, an investor may prefer to buyfrom a specific dealer who has successfully filled orders in the past,or where some other pre-established relationship has been developed.Similarly, a dealer may prefer to sell to specific investors, e.g., whohave been credit-worthy. Moreover, such transactions are typicallyconducted by telephone, and thus are time consuming and inefficient.

Third, multiple single-dealer systems have been used, where an investoris required to execute an order with a specific dealer or dealers.However, this requires the investor to contact each dealer, typically bytelephone, to determine what inventory and terms are being offered. Thisis also time consuming and inefficient. Moreover, the terms that areoffered can change from minute to minute, and the latest information maynot be offered to all investors on an equal basis.

Moreover, with the above approaches, access to new debt security issuesby the investors is not uniform since, again, information is typicallypassed by a word of mouth.

In a related development, various computer-based systems have beendeveloped for the buying and selling of equity securities, such asstocks. Many of these systems are targeted to the individual investorwho accesses the system via an Internet web browser. Other systems,which are used by investment houses and serious individual investorssuch as day traders, use private networks to communicate with marketmakers, who are typically located at the trading floors of the majorstock exchanges. Moreover, some private networks allow trading forindividual dealers.

However, the above-mentioned systems do not provide a comprehensivesolution for trading debt securities. Accordingly, there is a need for acomputer-based method and system for the buying and selling of debtsecurities which addresses the above and other issues.

SUMMARY OF THE INVENTION

The present invention provides a computer-implemented system for tradingof debt securities, including new issues and secondary market issues.

In accordance with the invention, multi-dealer inventory, trading,research and new issue features may be provided to investors for creditmarkets using a network. The network may employ a secure Internetapplication, for instance. All types of debt security products may beaccommodated, including, without limitation, high-grade bonds,high-yield bonds, emerging market bonds, agency bonds, municipal bonds,and European fixed-income products, including Eurobonds, Pfandbrief (aGerman security), European high-yield bonds, and European-dominatedemerging markets bonds. Moreover, the invention can be adapted for usewith future debt security products.

The invention brings together the capabilities and resources of a numberof different debt security broker-dealers, and allow investors topurchase the same securities from different dealers. Both new issues(primary market trading) and secondary market trading can beaccommodated.

The invention provides the following advantages over single-dealersystems: (a) Consolidates market information in a single location toimprove transparency, enhances liquidity by combining market-makingcommitments, enables the delivery of more new issues by aggregatingmarket share, and combines product/sector niches and areas of expertise;(b) increases competition by enabling all dealers to respondsimultaneously to inquiries; and (c) improves efficiency by enablingeasy comparison and combining of research ideas and pricing, and byproviding a consistent format that speeds information gathering.

Moreover, the invention provides the following advantages overcross-matching systems: (a) provides dealer capital that ensuresliquidity from day one/client one by having each dealer maintain aminimum number of issues at all times (e.g., 200 issues), and bycombining market share; (b) gives dealers incentives to continue to addvalue to clients via research and new issue allocations, and byproviding incentives for dealers to provide liquidity and salescoverage; (c) enables dealer partners to clear and settle trades, suchthat the trades are handled by stable back offices that the buyer knowsand trusts, so there is no need for the introduction of new startupsettlement agents; and (d) supports a business model with noper-transaction commission or fees.

The invention also streamlines all aspects of secondary trading. Inparticular, online, sortable cross-dealer research is provided toenhance idea generation, and dealers can post their inventory online andrespond simultaneously to inquiries to speed price discovery. Investorscommunicate directly with traders (dealers) online to streamline thenegotiation process. The investor can define the benchmark for treasurycrossing, which relates to an exchange of securities, to eliminateconfusion and price disputes. Furthermore, online, standardizedresponses and confirmations are provided to promote straight-throughprocessing and improve control process.

The invention provides fast, reliable technology, including a scalablearchitecture that maximizes capacity, hot standbys that minimize therisk of downtime, and rapid system response time.

The invention further provides a middle and back office that enablesdealer partners to handle all trade support and settlement, allowsindependent cross-dealer (i.e., multi-dealer) position valuation, andprovides consistent, exportable confirmations, e.g., using ExtensibleMarkup Language (XML).

The invention enable an easy setup via a download from the web, providesecurity, e.g., using the Secure Sockets Layer (SSL) and dual-keyencryption, provide established backup and recovery procedures, andinclude third party data services (e.g., information from MoneyLine™ orother financial news services). The invention may also provide a singleaccount agreement that covers trading with all broker-dealer andinvestor partners (i.e., any partner trading with any other partner).

The invention may be web-implemented, and provide an on-screen userinterface at the broker-dealer side and at the investor side thatfacilitates the use of the above features.

In particular, a method for providing computer-implemented trading fordebt securities includes the step of providing respectivecomputer-generated interfaces for a plurality of dealers and a pluralityof investors. A network enables messages to be exchanged between thedealer interfaces and the investor interfaces. Additionally, the dealersare enabled to communicate announcements of new debt security issues tothe investors via the investor interfaces so that each investor canaccess new debt security issues from multiple dealers via his or herrespective investor interface. The investors are enabled to submitrespective indications of interest in purchasing the new debt securityissues to selected ones of the dealers via the selected dealers'respective interfaces. The dealers then allocate the debt securityissues to the investors in accordance with their respective indicationsof interest. Advantageously, the investor can access the inventory ofmultiple dealers via a common platform. Moreover, the process ofgathering indications of interest is automated for the dealers.

A corresponding apparatus is also presented, along with a computerprogram product.

BRIEF DESCRIPTION OF THE DRAWINGS

For a fuller understanding of the invention, reference is made to thefollowing description taken in connection with the accompanyingdrawings, in which:

FIG. 1 illustrates an overview of a multi-featured platform;

FIG. 2 illustrates a high level system diagram;

FIG. 3 illustrates a more detailed system diagram;

FIGS. 4-9 are user interfaces for primary market (new issue) trading ofdebt securities;

FIG. 4 shows an interface that provides an investor with acalendar/inventory of new issues from multiple dealers;

FIG. 5 shows an interface that provides an investor with details of aparticular issue, and allows the investor to create an indication ofinterest, for a new issue;

FIG. 6 shows an interface that provides a notice to an investor whencreating an indication of interest;

FIG. 7 shows an interface that allows an investor to monitor thereal-time status of its IOIs;

FIG. 8 shows an interface that displays final pricing information to aninvestor;

FIG. 9 shows an interface that displays an indication history to aninvestor;

FIGS. 10-18 are user interfaces for secondary market trading of debtsecurities in accordance with the present invention;

FIG. 10 shows an interface that allows an investor to selectively viewan available inventory of security issues;

FIG. 11 shows an interface that allows an investor to view details of aselected issue;

FIG. 12 shows an interface that allows an investor to enter an inquiryfor a selected issue;

FIG. 13 shows an interface that allows a dealer to view and respond toan investor's inquiry;

FIG. 14 shows an interface that allows an investor to view multipledealer responses to the investor's inquiry, and accept an offer orprovide a counteroffer;

FIG. 15 shows an interface that allows an investor to confirm thedetails of a trade and to enter spot details;

FIG. 16 shows an interface that confirms the price and spot details of atrade;

FIG. 17 shows an interface that allows an investor to view activelytraded issues; and

FIG. 18 shows an interface that allows an investor to compare the bidand offer of different dealers for an actively traded issue, and toenter a buy order.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The preferred embodiments of the invention are now described withreference to the drawings in the figures.

The on-screen interfaces disclosed herein may use the following acronymsand abbreviations:

Alloc—Allocation

An Dt—Announcement Date

AON—All Or None

ASC—Awaiting Spot Confirmation

BM—Benchmark

bps—Basis points

B/S—Buy/Sell

Ccy—Currency

Cpn—Coupon

Cross—Crossing

CUSIP—Committee on Uniform Securities Identification Procedures

Dlr—Dealer

Flg—Flag

GF—Good For

IOI—Indication of Interest

LAN—Local Area Network

LDAP—Lightweight Directory Access Protocol

M—thousand

MF—Minimum Fill

Mgr—Manager

Mgmt—Management

mm—Thousands

Mty—Maturity

Msc—Miscellaneous

MW—Make Whole call

NA—Not Available

NM—No Minimum

Prc Dt—Price or Pricing Date

QA—Quality Assurance

Req—Required

Resp—Response

SD—Single Dealer

Secto—Sector

S&P—Standard and Poor's

Sprd—Spread

Sr Bd—Senior Bond

Sr Nt—Senior Note

Subj—Subject

Sz—Size

T—Trade Date

Tkr—Ticker

TSY—Treasury

Updt—Update

USD—United States Dollars

UST—United States Treasury

Vol.—Volume

YTM—Yield to Maturity

FIG. 1 illustrates an overview of a multi-featured platform inaccordance with the present invention. Generally, the platform 100provides computer-implemented trading 112, syndication 114 and researchand marketing information 116 functions for a number of investor clients110 and dealers 120. In one business implementation of the invention,the investors are clients of the organization that runs the platform,while the dealers have partnership arrangements with the organization.The trading functions 112 include providing an inventory of availablesecurity issues (bonds), pricing of the issues, and a history oftransactions for record-keeping purposes. The trading functions 112 alsoenable investors to submit inquiries for, and make trades in, secondarymarket issues.

Syndication generally refers to the process of having a group of banksacting together, temporarily, to underwrite a new issue of bonds.Specifically, the syndication functions 114 include providing a calendarof new issues, including the managers of the issue, details of theissue, such as type of issue, term, coupon, rating, and so forth, theannouncement date, and the pricing date. The syndication functions 114may also include links to on-line prospectuses for the issues, roadshows(marketing presentations). The syndication functions 114 also allowinvestors to submit indications of interest in the new issues to allowthe underwriters/dealers to determine the demand for the issue and set aprice. Finally, orders for the new issues may be placed by investors.

The research and marketing information 116 functions may include on-lineresearch reports regarding the issues, announcements, and other data andanalytics, which are tools for analyzing issues.

FIG. 2 illustrates a high level system diagram in accordance with thepresent invention. Here, a data center 220 includes a number ofcentralized computing resources for storing, processing and routing databetween the investors' computers 230 and the dealers computers.Specifically, the data center 220 and computers 230, 250 may employ anyknown type of computing hardware and software that should be apparent tothose skilled in the art for carrying out the functions describedherein. The investor and dealer computers 230, 250 may be personalcomputers or workstations, for example, while the data center 220 mayemploy known servers, backup storage devices, network communicationsdevices and so forth (see FIG. 3 for further details). Generally, anetworked application may be written using any available programminglanguage for running at the data center 220, and at the computers 230,250. The data center 220 provides a central clearinghouse for thedealers and investors, and is typically located remotely. A systemadministrator 210 oversees and maintains the data center 220.

A computer program product such as an optical or magnetic data storagedevice may be provided that includes software for programming thecomputers to perform the desired functions. The product may include acomputer usable medium having computer readable program code meansembodied therein for providing the desired functions.

In one possible implementation, the investors 230 communicate with thedata center 220 via a secure Internet network 240. The dealers 250 maycommunicate with the data center 220 via secure leased lines 260. Ofcourse, other variations are possible, but the implementation shown isbelieved to be appropriate for situations where the number of dealers250 is relatively small, and the number of investors 230 is relativelylarge.

FIG. 3 illustrates a more detailed system diagram in accordance with thepresent invention. The figure illustrates a production environment. Thesystem includes a management connection function 310, including aMarketAxess function, which has tools for monitoring and maintaining thesystem. The function 310 communicates with a general management LAN 312in a production network 309 via respective management connections andfirewalls. A backup server 311 may be provided for storing data from theMarketAxess function.

A disk array 313 provides data storage for a transaction and referencedatabase server 315. This server records details of all transactionsbetween investors and dealers, as well as reference information for thesecurities. For example, the server may be a Sun 4 CPU 450 MHz with 2×18GB internal storage. The general management LAN 312 is also accessed bya server 317, such as the Pivotal™ accounting and reference server.

A staging network 330 includes a database server 332, a database stagingLAN 334, servers 336, a staging LAN 337, such as the Rendezvous (RV)made by Tibco, and dealer gateways and distribution servers 338. Thedatabase staging LAN 334 communicates with the general management LAN312, while the dealer gateways and distribution servers 338 communicatewith the internal distribution LAN 324.

An arrangement for external connectivity 340 is also provided, whichcommunicates with the production network 309 via the internaldistribution LAN 324. The internal distribution LAN 324 and generalmanagement LAN 312 communicate via deal gateways and distributiongateways 322, and RV LAN 318, servers 316, and a database LAN 314. Theexternal connectivity 340 includes equipment for communicating with thedeals and investors. The IXNet network 341 in the external connectivitysection 340 indicates an example of a private network used tocommunicate with the dealers. The Internet 240 communicates with theinvestors 230, and receiver reference date source information.

A quality assurance (QA) function 360 may also be provided formonitoring quality in the other devices. This function 360 includes adatabase server 362, servers 364, and dealer gateways and distributionservers 366.

FIGS. 4-9 are user interfaces for primary market (new issue) trading ofdebt securities in accordance with the present invention.

FIG. 4 shows an interface 400 that provides an investor with acalendar/inventory of new issues from multiple dealers. The interfaceshows a cross-dealer new issue calendar, which lists the availableissues from the different dealers. Advantageously, the investor hasimmediate access to a multi-dealer inventory of new issues. Moreover,the issues may be sorted base on various criteria, such as issue name,manager, announcement or pricing date, and so forth. The investor thusdoes not have to consult each manager separately to see what issues theyhave. Note that the button “calendar” has been activated to provide thedisplay, as designated by the right arrow (

). This notation will be used in other figures as well to indicate abutton that has been selected.

New issues are placed on the calendar (e.g., announced) prior to thetime they are priced. For each issue, the issue name is given (e.g.,Acme Widgets Corp.), along with the size of the issue (in thousands ofdollars), and details regarding the issue (e.g., type of note, term,rating, and so forth). Moreover, one or more lead managers aredesignated, discussed further below. Here, the lead managers are BSC(Bear Stearns Corp.) and JPM (J.P. Morgan Chase). The otherabbreviations and acronyms under “Lead managers” denote other examplesof financial services organizations. The asterisk next to the manager'sname indicates they are available to receive IOIs via the system.

The status or state of the issue is also indicated by the calendar.Generally, an issue is announced, then priced, then launched, thensettled. “Announced” indicates that details of the issue have been madeavailable to investors via the system. “Priced” indicates a preliminaryprice has been established for the issue based on the level of interestshown by the investors following the announcement. “Launched” indicatesthe issue is currently being distributed. “Settled” indicates thetransactions for the issue are completed. “Subject” indicates theinformation regarding the issue is subject to change. The announcementdate (An Dt) is provided along with the Pricing Date (Prc Dt). Forissues that have been just recently announced, a pricing date may notyet be determined. The announcement date may be the same or earlier thanthe pricing date.

The name of the issue may be provided as a hyperlink to a new screenthat provides full details regarding the issue, including price talk.Price talk refers to comments related to the price that have been made.The additional details may include the coupon, maturity, rating,benchmark, and bookrunner. The bookrunner is the managing underwriterfor a new issue, and maintains the book of securities sold. The newscreen can appear when the investor selects the hyperlink, e.g., byclicking on it with a mouse or the like.

Also, for the issues that have not yet been priced, a widget such as abutton may be provided to allow the investor to submit an indication ofinterest (IOI) to a dealer. The investor may also select informationsuch as a prospectus or roadshow (marketing pitch) regarding the issue,or obtain details on the management group of the issue, such as thepersonnel who are managing it.

For example, for the issue “Anheuser Busch”, the announcement date (AnDt) is 06/22, and the Pricing Date (Prc Dt), when the price is set, isalso 06/22. The size of the issue is provided as 300,000 (thousands).The state of the issue is “priced”, which means a price has been set.The lead managers are BSC (Bear Stearns Corp) and CSFB (Credit SuisseFirst Boston).

For primary market trading of debt securities, a new issue may behandled by one dealer or a group of dealers (e.g., a syndicate). For agroup, one dealer is typically the lead co-manager. Moreover, joint leadco-managers may be provided in some cases. Senior and junior co-managersmay also be designated. Generally, when the dealer or dealers underwritea new issue, they first obtain a feel for the level of interest in theissue from investors (via the investor's IOIs) before pricing the issue.An issue with a high degree of interest may be oversubscribed, while anissue with a low degree of interest may be undersubscribed. Foroversubscribed issues, the dealers must allocate the available issuesamong the interested investors. For undersubscribed issues, there willbe issues left over. The issue is then priced accordingly at the pricingdate. Moreover, the dealers collect the IOIs prior to the pricing datein the process of book building.

The investor may click the button “IOI” next to an issue to submit anIOI for that issue, as well as view further details regarding the issue(see FIG. 5). Thus, in accordance with the invention, once the issue isannounced, all investors have an equal opportunity to express aninterest in purchasing it. Moreover, the issuing dealer has anopportunity to gauge the degree of interest in the issue prior to itslaunch from a large population of investors. Once the “IOI” button isselected, the interface of FIG. 5 is activated to allow the investor toview full details regarding the issue, and to enter details regardingthe IOI.

The interface 400 also provides links to a home screen, a noticesscreen, and an indications submitted screen (see FIG. 7).

FIG. 5 shows an interface 500 that provides an investor with details ofa particular issue, and allows the investor to create an indication ofinterest, for a new issue. The details may include a manager section510, including the title, lead managers, bookrunners, and senior andjunior co-managers. A checkbox or circle may also be provided to allowthe investor to designate which manager is to receive the IOI, andwhether the other co-managers (i.e., all of the other managers,regardless of status as lead, senior or junior) are to be informed thatan IOI was sent to the selected manager. Any of the managers listed maybe designated to receive an IOI (assuming they participate in the systemas indicated by an asterisk). The darkened circle indicates the featureis selected, while an open circle indicates the feature is not selected.This notation will be following in other figures as well. The investormay click on the circle using a mouse or other pointing device to togglethe selection.

An interface section 520 allows the investor to enter information suchas the size (dollar amount) of the issue that he or she is interested inpurchasing. The investor may also enter the level, which may be marketorder, in which case the investor agrees to pay the market price that isset by the dealer, or limit spread, in which case the investor enters amaximum spread in terms of basis points, or enters a minimum requiredyield. The IOI type is also designated as being no minimum, in whichcase the investor agrees to buy any amount of issues below the requestedquantity; minimum fill, in which case the minimum amount is specifiedfor filling an order when there are multiple trades; or all or none, inwhich case the full amount must be filled in one trade, not multipletrades.

Moreover, the investor designates whether the IOI is to be re-confirmedor auto-accepted via the “Auto-Verify” checkboxes. “Yes” means the IOIis to be re-confirmed by the investor. “No” means the IOI isautomatically accepted. Typically, for the investor's protection, theIOI must be reconfirmed when any information regarding the new issuechanges, such as issue size, change in managers, timing of the issue,and so forth.

A comment field is also provided to allow the investor enter any notesthat can be retrieved later. Additional information may also be accessedvia a prospectus button, an IDs (identifiers) button, and a sellrestrictions button.

Further details related to the issue are given in an interface section530, including the Ccy/size, the coupon type, coupon frequency, firstcoupon date, redemption, debt ranking, maturity, announcement date,expiration price date and time, settlement date, day count, pricingbenchmark (bmk), Moody's rating, S & P rating, Fitch IBCA rating (aEuropean credit rating agency), the minimum bid size, and the minimumdenomination. These details may be entered into the system manually bythe dealers via corresponding dealer interfaces, and/or imported from adatabase. Moreover, the dealers and investors may provide inputs andreceive outputs via their interfaces in any known manner, e.g., viakeyboard, mouse or other pointing device, voice interface, audiointerface, video screen, and so forth. Thus, references herein toactivating a function by clicking a button or the like are just exampleimplementations, as the invention is meant to encompass any knowninterface techniques.

At the bottom of the interface 500, by selecting the “submit” button,the investor may submit the IOI to the designated manager after makingthe desired selections.

Note that the buttons at the top of the interface 500 and otherinterfaces allow the investor to navigate between the different screens.

FIG. 6 shows an interface 600 that provides a notice to an investor whencreating an indication of interest. The notice is required by applicablesecurities regulations. If the investor accepts the terms, the IOI issent to the designated lead managers and co-managers. The dealersreceive the IOIs from different investors over time following theannouncement date, and determine the level of interest in the issue. Aprice may then be set accordingly when the issue is launched. At thattime, the dealers may begin to fill the investors orders based on theterms provided by the investors via the interface 500. If an investorselected the auto-verify function, he or she will be prompted to confirmthe IOI after the issue is launched. Once the IOI is confirmed, theorder can be filled.

FIG. 7 shows an interface that allows an investor to monitor thereal-time status of its IOIs. An activity alert pop up box 710 informsthe investor that the IOI has been allocated (i.e., an amount of theissue has been set aside by the dealer for purchase by a particularinvestor). The alert pops up some time after the IOI has been submitted,typically later in the same day, or a number of days later, depending onthe issue. This is valuable since the investor is immediately made awareof the allocation. Moreover, by clicking on the “Now” button, thedisplay 720 appears, either on the same screen or on a new screen, toprovide messages and issue details. In particular, the display 720informs the investor that an allocation of $24,000,000 has been made,which is less than the requested quantity of $38,000,000. This isacceptable since the IOI type is “no minimum” (NM). The level, paymethod and manager are also indicated as previously selected by theinvestor. Using the indicated button, the investor can cancel the IOI,or verify the allocation. Moreover, further details of the issue may beprovided, along with a history (e.g., when provided, and details)thereof by selecting the appropriate buttons in the display 720. Theinvestor may also navigate among multiple pages to view additional IOIsthat have been submitted using the previous (“prev”) and “next” buttons.

FIG. 8 shows an interface 800 that displays final pricing information toan investor. This information is available when a new issue has beenpriced, which may be hours or days after the IOI has been submitted. Theinterface indicates that the trade is ready to be accepted and exported,e.g., to a back office/accounting function, an archive, and/or acustodian. By clicking on the “accept” button, the investor's request topurchase an issue will be filled by a dealer, with trade details thatare acceptable to both parties. By clicking on the “cancel” button, thetransaction is cancelled. Generally, the details of the final pricinginterface 800 should agree with the criteria entered when the IOI wascreated (see FIG. 5). The allocation, price, and spread of the issue areshown in the region 810 of the interface 800.

FIG. 9 shows an interface 900 that displays an indication history to aninvestor. The indication history notes, for each inquiry, whether aprice has been confirmed, an allocation has been verified, an allocationis available and should be verified, an IOI has been verified, an IOIshould be reviewed and verified, or an IOI has been submitted. In theexample shown, the IOI was initially submitted at 10:30 am via theinterface 500. At time 10:35, the system prompted the investor to reviewand re-verify the IOI. At time 10:40, five minutes later, the IOI wasverified. At time 13:36, an allocation was made available by the dealer,and the investor asked to verify. At time 13:37, the investor verifiedthe allocation. At time 13:38, the price was confirmed.

FIGS. 10-18 are user interfaces for secondary market trading of debtsecurities in accordance with the present invention.

FIG. 10 shows an interface 1000 that allows an investor to selectivelyview an available inventory of security issues that are being offered orbid on by dealers in the secondary (resale) market. Advantageously, theinvention increases liquidity and market efficiency by bringing togetheravailable issues from multiple dealers for easy access by investors on acommon platform, with trade information provided in a standardized,sortable manner.

Moreover, the investor may select different inventories, e.g., from thebuttons “US High Grade”, which are investment-grade US securities, “USDEurobond”, which are US dollar denominated, and “EUR Eurobond”, whichare euro-denominated. Here, “US High Grade” is selected as indicated bythe arrow (

). Additionally, the investor may view an inventory using the“inventory” button, or to conduct a trade of a selected issue in theinventory using the “trade” button.

Filters may also be selected by clicking a check box or the like to viewoffers, bids, or actively-traded securities (“actives”). Here, “offers”is selected. The investor seeking to buy an issue will select “offers”to view the offer or selling terms of the dealers, while an investorseeking to sell an issue will select “bids” to view the bid or buyingterms of the dealers. Note that this is in contrast to the primary issuemarket, where the investors are only buyers. Moreover, not that whileseparate interfaces may be provided for offered and bid issues, it ispossible to have a combined interface that lists both offered and bidissues.

The investor may enter the ticker or CUSIP designators for one or moreissues of interest to obtain further information using the “search”button. The requested inventory appears on the screen 1000 in the region1010, and the investor can select the particular issue of interest,e.g., using a pointing device or the like to click on the issue. Here,the issue “WORLDCOM INC” is selected as indicated by the arrow (

). In the region 1010, relevant information is provided for each issue,including the size (number of issues available, in thousands), therating, the issuer, the ticker, the coupon (in percent), the maturitydate, spread (the different between the bid and asked price in basispoints, where one basis point=0.01%), any special flagged note, and thebenchmark. The benchmark is usually expressed in terms of a percentageabove a U.S. Treasury note rate, where the maturity date of the note isindicated. This is typically the most recently issued Treasury securityof the given maturity, and is known as an “On-The-Run” Treasury. Itsvalue is updated daily. For WORLDCOM INC, the benchmark is UST 5.75011/05. A dealer identifier and an update field (which designates whenthe information for the issue was last updated) are also provided. Adealer identifier of *** indicates there are multiple dealers thatcannot be indicated in the current screen space. The screen may bedesigned to accommodate multiple dealer identifiers if desired.

The particular issue details may be entered manually by the dealers attheir respective interfaces, and/or imported from a database. Typically,many screens of new issues are presented that the user may navigate bypaging through using the “prev” and “next” buttons. Only a few exampleissues are provided in the interface 1000 for clarity. Moreover, theissues may be sorted according to the various fields on the title bar,e.g., size, rating, issuer, ticker, coupon, maturity, spread, benchmark,dealer, or update time (when details of an issue were last updated by adealer). This enables the investors to quickly and methodically locateand review issues of interest, and to obtain up-to-the minute updatedinformation for each issue.

FIG. 11 shows an interface 1100 that allows an investor to view detailsof a selected issue. For example, the investor has selected the“WORLDCOM INC” issue. WCOM is the ticker of the issuer, and 7.550% isthe coupon. The interface provides the corresponding details of eachdealer's bids and offers, the inside market, and the freshness of theindicated price (in the “updated” field). In this example, the issue isoffered by three dealers. If a time is given, it indicates an update inthe current day. The inside market refers to the highest bid and thelowest ask prices made by a dealer for its own inventory. For example,the dealer BSC provides an offer with a size of 32,400 and a spread of215 basis points. The dealer DB provides a bid with a size of 2,000 anda spread of 230 basis points, and an offer with a size of 3,000 and aspread of 215 basis points. The dealer UBSW provides an offer with asize of 6,733 and a spread of 217 basis points. Note that spread iscorrelated with yield, so a higher spread means a higher yield. Thus, abuyer seeks out the highest spread, and the seller seeks out the lowestspread.

The inventory detail interface 1100 thus allows the investor toimmediately determine which of the multiple dealers provides the bestterms for a particular issue of interest.

FIG. 12 shows an interface 1200 that allows an investor to enter aninquiry for a selected issue. After viewing the details of the selectedissue in the interface 1100, the investor may wish to enter an inquiryfor the issue to buy or sell it. The interface 1200 appears when theinvestor clicks on the “trade” button on the interface 1100. Using thecheck boxes shown, the investor may select an action of requesting abid, or requesting an offer. Moreover, the investor may enter a firmprice signaling that the investor intends to trade immediately, or theinvestor may enter an “indication” only, which is “subject to” (or“price subject”) subsequent agreement on the price of the issue.Moreover, the investor may enter specific inquiry details, inquiry size,SD, inquiry type (where cash indicates a cash sale, and cross indicatesan exchange of securities), and a benchmark, which is selected from adrop down tool, as indicated by the downward arrow (z,901 ).

In the region 1210, the investor may also select which of one or moredealers to poll (i.e., send the inquiry to). This is particularlyadvantageous since the investor may prefer to buy from specified dealerswith whom the investor has a pre-existing relationship. Moreover, theinvestor may prefer specific dealers due to previous experiences, e.g.,in successful settling. Advantageously, the invention allows an investorto choose to trade with a known dealer. In one possible implementation,the desired dealer may be selected by clicking on a button that togglesbetween YES and NO.

Moreover, the investor can obtain the best terms for a given issue sincemultiple dealers are competing for the investor's trade. In this regard,note that the “in competition” check box may be checked when theinvestor sends its inquiry to more than one dealer. The correspondingdealer interfaces (FIG. 13) inform each dealer that it is in competitionwith at least one other dealer, although preferably the identity of thecompetition is not specified to avoid collusion.

Furthermore, the investor may set a timer (or a default timer may beused) that indicates a time for the dealers to respond to the investor'sfirm price or indication/subject price, such as 5 minutes. In onepossible implementation, the timer provides different times using a dropdown tool. An activity log captures and time stamps all details of theinquiry and trade process, while a status log indicates the status ofthe inquiry. Here, these fields are empty since the inquiry has not yetbeen sent via the “submit” button.

FIG. 13 shows an interface 1300 that allows a dealer to view and respondto an investor's inquiry. Here, the dealer sees that a firm inquiry hasbeen made (as opposed to a subject inquiry). The details of the issueare provided, along with an identifier of the sender (e.g., “macary ateclientj”). The time when the offer is due is also provided (5 minutes).There is no benchmark crossing since the inquiry type is cash. Anadditional notes field provides information to the dealer. Moreover, astatus field indicates a response is requested. If desired, the dealerresponds by entering details of an offer to the inquiring investor,including spread, benchmark, size and time limit for responding (e.g.,three minutes), then clicking on “submit”. Otherwise, the dealer mayenter a pass, signaling that it is not interested in the trade. A timer1310 indicates the time left for the dealer to respond to the inquiry.Note that the example three-minute time limit set by the dealer may notbegin running immediately when the offer is submitted. Instead, it maybegin to run when the offer is released from the holding bin, asdiscussed further below.

Each of the different dealers that were selected by the investor (viathe interface 1200) view the interface 1300. The interface 1300 allowseach dealer to see the details such as the investor's (client's)identity and the inquiry. Additionally, any non-standard details of theinquiry may be indicated, such as a non-standard settlement date.

The activity log indicates that the investor (whose identifier is“eclientj”) has submitted an offer for 5,000,00 of the issue WCOM at acoupon of 7.550 and a maturity of 04/01/2004. Optionally, the interface1300 may inform the dealer that it is in competition with other dealers;that is, that the inquiry was sent to at least one other dealer. Thiscan be enabled by the system by tracking whether an incoming inquiryfrom an investor has been addressed to multiple dealers, and sendingdata for producing a corresponding message on the dealer's interface1300.

FIG. 14 shows an interface 1400 that allows an investor to view multipledealer responses to the investor's inquiry, and accept an offer or bid,or provide a counteroffer. Here, the four dealers that the investorselected via the interface 1200 have submitted responses to the inquiry.In particular, as shown in the region 1410, the dealers ABN, BSC andCSFB have submitted offers, while the dealer DB has submitted a pass.Moreover, the best offer has been highlighted by the system. Here, ABNsubmitted the best offer since the spread of 192 basis points is abovethe spreads of BSC and CSFB (191 and 189 basis points, respectively).The system can select the best offer by determining the best spread,i.e., based on its magnitude. This can be achieved, e.g., using knownalgorithms that determine the minimum or maximum value in an array ofnumbers. The status field indicates that a response is requested, whilethe activity log indicates the details of each dealer's response.

In an important aspect of the invention, offers or bids from multipledealers to one investor are stored in a conceptual “holding bin”, andare subsequently released to the investor at the same time. The pricetimer then indicates the amount of time the investor has to respond byeither selecting “counter” to provide a new counteroffer (by returningthe user to the interface 1200), or “accept” to accept a specificdealer's offer or bid. When the investor provides a counteroffer, thedealer may then submit a further offer or bid in response. Repeatednegotiation cycles may occur in this manner.

The price timer can be different for different dealers, and may be setby the “good for” field on the interface 1300. Here, the price timer hasbeen set at three minutes for each dealer, and four seconds have passedsince the concurrent release of the offers (thus, 2:56 remains).Optionally, default timer amounts may be used for the “due in” and/or“good for” times. The data center 220 may be used to implement thisfeature by withholding the transmission of the responses to the investorinterfaces until the “due in” time set by the investor has elapsed.Optionally, a partial transmission is made to the investor interfacesuch that the presence of the offer or bid from a specific dealer may beknown, but not the details, e.g., regarding size, spread, benchmark, andGF (the “good for” time, until the timer expires).

This aspect of the invention improves the uniformity of the tradeprocess by allowing an investor to consider all offers or bids together(at least for a time period equal to the smallest of the dealer-imposedtime limits). The investor is relieved from having to decide whether toaccept one offer or bid when another offer or bid may be received withinseconds or minutes.

FIG. 15 shows an interface 1500 that allows an investor to confirm thedetails of a trade and to enter spot details. After the investor hasaccepted a particular dealer's offer or bid, spot negotiations mayoccur, where the investor confirms the spot vs. the investor'sbenchmark. The investor may accept or re-spot the benchmark via acounteroffer to complete the trade, by clicking on the “accept” or“counter” buttons, respectively. The dealer may impose a time limit forthe investor to respond to the dealer's spot details, e.g., one minute,while the investor may impose a time limit for the dealer to respond tothe investor's spot details. Or, the system may impose a default timelimit.

Here, the status log notes that the spot is Awaiting Spot Confirmation(ASC), and the activity log notes, at 14:10:35, that the dealer (ABN)requests a 101-200 (4.874 yield) spot on the Treasury having a 6.125%rate and maturity of 08/31/2002. This information is presented to theinvestor in the spot negotiation region 1510 of the interface 1500. Notethat “101-200” denotes the value 101+20× 1/32+0×⅛× 1/32.

FIG. 16 shows an interface 1600 that confirms the price and spot detailsof a trade. The “status: filed” indicates the trade is done. The priceis $99.990. As indicated by the activity log, the investor “eclientj”agreed on the final price at time 14:11:11, 36 seconds after it wasreceived. The trade information provided by the interface may beexported as desired, e.g., to a back office/accounting function, anarchive, and/or a custodian. An exportable audit trail shows thecompetitive bid/offer process. The activity log notes that the investorhas accepted the dealer's spot at 10:53:29, four seconds after it wasprovided.

FIG. 17 shows an interface that allows an investor to view activelytraded issues. From the inventory of available issues, the most activelytraded issues may be identified and flagged in the system, e.g., basedon an operator input. For example, the active trading status may bebased on the size of the security when it was originally issued, e.g.,whether the issue exceeded one billion dollars. Other criteria may alsobe used. Moreover, the most active issues can be designated for separatecategories, such as financials, industrials, utilities, supra/sovereigns(supra-national refers to international organizations such as theInternational Monetary Fund or the World Bank), or for all issues, asindicated by the check boxes in the interface 1700. Also, the number ofmost active issues can be determined as a percentage of the number ofissues, e.g., 5%, or as a fixed number, e.g., the top fifty issues.Furthermore, the active issues may be displayed in order of theirrelative activity, or based on other criteria, such as alphabetical byticker or issue name, or by maturity date. The determination of activeissues may be adjusted periodically, such as once a week.

Advantageously, by providing an inventory of actively traded issueswhich are expected to have high liquidity, a tradeable two-way market iscreated that allows an investor to submit an order (not an inquiry) to adealer for quick execution. This avoids the need for the inquiry andresponse process described previously for secondary market issues. Forexample, for the issue AOL, the dealer JPM provides a bid of 122, andthe dealer UBSW provides an offer of 121. “(5)” denotes an order size offive million.

FIG. 18 shows an interface that allows an investor to compare the bidand offers of different dealers for an actively traded issue, and toenter a buy order. Here, the bid and offer details, including size andspread are provided for the different dealers that offer the given issue(e.g., AOL). UBSW is highlighted since it provides the highest spread121 basis points), which is most advantageous for the investor as buyer.In the Buy Order region 1810, the investor may enter the size of theorder and indicate whether it is all or none. The investor may alsoindicate whether the trade is to be outright (cash) or a crosstransaction (exchange or securities).

By clicking on the “submit” button, the order is sent and responded toby the dealer by accepting or rejecting it. Advantageously, unlike theinquiry process, no negotiations occur, so execution is faster.

Accordingly, it can be seen that the present invention provides acomputer-implemented method for trading of debt securities. In oneaspect of the invention, dealers announce new debt security issues toinvestors via respective computer-generated investor interfaces in anetwork. The investor interfaces allow the respective investors tocommunicate respective indications of interest in purchasing the newdebt security issues to the dealers via respective computer-generateddealer interfaces. The dealers can allocate the debt security issues tothe investors in accordance with their respective IOIs. Moreover, theinvestors can specify which dealers receive the IOIs.

In another aspect of the invention, an inventory of issues from multipledealers is made available to investors on a secondary trading market ina searchable format. Again, the investor can choose which dealers totrade with for a given issue. Moreover, the investor may place multipledealers in competition with one another for a trade. In this case,offers from the dealers are held in a holding bin and released to theinvestor concurrently to allow the investor to consider all offerstogether. The investors and dealers may also specify time limits for theother party to respond. Negotiation of spot details between the dealersand investors is also enabled.

In a further aspect of the invention, the dealers post bid and offerterms for actively traded issues that are updated in real-time to avoidthe need for the inquiry procedure.

While the invention has been described and illustrated in connectionwith preferred embodiments, many variations and modifications as will beevident to those skilled in this art may be made without departing fromthe spirit and scope of the invention, and the invention is thus not tobe limited to the precise details of methodology or construction setforth above as such variations and modification are intended to beincluded within the scope of the invention.

What is claimed is:
 1. A computer-implemented method for providing anannouncement of a security, and bid and/or offer terms thereof,comprising: electrically determining the exchange of said announcementbetween at least one dealer and investors; electrically transmittingsaid announcement of the security and bid and/or offer terms thereof toa computer of the investors listing the available issues from the atleast one dealer so that each investor can access the securityannouncement via his or her respective investor computer interface, andproviding the investors immediate access to a multi-dealer inventory ofissues responsive to the announcement including a calendar on whichissues are placed prior to the time they are priced, and the calendarindicating at least one of a lead manager, a status of the issue, pricetalk, the coupon, maturity, rating, benchmark, and bookrunner, where anavailable issue may be handled one dealer or a group of dealers, thegroup of dealers led by one or more co-managers; electrically receivingfrom the investors indications of interest in response to theannouncement; electrically enabling investors to submit indications ofinterest to only one or more selected dealers; electrically enablinginvestors to determine whether additional dealers are informed thatindications of interest were sent to other dealers; electricallyproviding a notice to the investor providing terms associated with theindication of interest that must be accepted before the indication ofinterest is sent; receiving an indication from an investor whether anindication of interest is to be re-confirmed or auto-accepted;electrically providing a real-time status and history of an investor'sindication of interest, the status and history indicating historynotices, whether a price has been confirmed, an allocation has beenverified, an allocation is available and should be verified, anindication of interest has been verified, an indication of interestshould be reviewed and verified, or an indication of interest has beensubmitted; electrically enabling the investors to view additionalindications of interest that have been submitted; electricallydetermining at least one of an allocation and a price for the securitybased upon the received indications of interest; electricallytransmitting to the investors that the indication of interest has beenallocated; displaying final pricing information to the investors; andelectrically providing a timer to indicate a time to complete atransaction, where the time can be different for different dealers. 2.The method of claim 1, wherein the investors are a plurality ofindividuals.
 3. The method of claim 1, where in the investors are in amarket.
 4. The method of claim 1, further comprising: providing an audittrail for tracking receipts of interest.
 5. The method of claim 1,further comprising: enabling the investors to enter customized searchingcriteria for searching the inventory via their respective interfaces. 6.The method of claim 1, further comprising: preparing records of tradeexecutions for the new debt security issues; and exporting the recordsto at least one of a back office/accounting function, an archive, and acustodian.
 7. The method of claim 1, wherein the announcement furthercomprises a calendar of new issues.
 8. The method of claim 1, whereinthe dealer further comprises a syndicate of banks acting together tounderwrite the issue.
 9. The method of claim 1, wherein at least one ofthe price and allocation for the security is determined at the pricingdate.
 10. The method of claim 1, wherein the indications of interestinclude at least one of quantity, level, type, settlement and specialinstructions.
 11. The method of claim 1, further comprising: receivingfrom investors modifications to the details of indications of interest.12. The method of claim 1, wherein the announcement is for the issue ofa new security.
 13. The method of claim 1, further comprising: makingthe announced security available for purchase after at least one of theallocation and price has been determined.
 14. The method of claim 1,wherein the indication of interest is at least one of market, limitspread, minimum required yield, no minimum, minimum fill, and all ornone.
 15. The method of claim 1, further comprising: determining thedemand for the issue in response to the indications of interest receivedfrom the investors; providing a status of the issue security; making theannounced security available for purchase after at least one of theallocation and price have been determined; and filling orders inresponse to indications of interest from each of the plurality ofinvestors.
 16. The method of claim 1, further comprising: enablinginvestors to post and/or review comments related to the price of asecurity.
 17. A system for providing an announcement of a security, andbid and/or offer terms thereof, comprising: a data center enabled todetermine that said announcement is to be exchanged between the dealerand investors; and a computer system having a server enabled toelectrically communicate said announcement to investors via an interfaceso that each investor can access the security announcement via his orher respective investor interface, the announcement comprising a listingof at least one of the security name, security details, status and oneor more lead managers prior to the pricing of the security; and receivefrom at least one investor, via the interface, indications of interestin response to the announcement, the indications of interest includingat least one of quantity, level, type, settlement, special instructions,the respective dealer or dealers to receive the indication of interest,and an indication whether the indication of interest is to bere-confirmed or auto-accepted, provide a real-time status and history ofan indication of interest, and determine, at a pricing date, at leastone of an allocation and a price for the security based upon thereceived indications of interest.
 18. A computer-implemented method forproviding an announcement of a security, and bid and/or offer termsthereof, comprising: electrically determining the exchange of theannouncement between dealers and investors, the announcement comprisinga calendar of new issues containing details of at least one new issuesecurity; electrically communicating the announcement of the securityand bid and/or offer terms thereof to an interface of a computer of theinvestors so that each investor can access the security announcement viatheir respective investor interface; electrically receiving from theinvestors indications of interest in response to the announcement, theindications of interest including at least one of quantity, level, type,settlement, special instructions, the respective dealer or dealers toreceive the indication of interest, and an indication whether theindication of interest is to be re-confirmed or auto-accepted;electrically receiving an indication from an investor whether anindication of interest is to be re-confirmed or auto-accepted;electrically providing a real-time status and history of an indicationof interest the real-time status and history including at least anindication whether a price has been confirmed, an allocation has beenverified, and indication of interest should be reviewed and verified, oran indication of interest has been submitted; electrically determining,at a pricing date, at least one of an allocation and a price for thesecurity based upon the received indications of interest, andtransmitting to the investors that the indication of interest has beenallocated; displaying final pricing information to the investors; andelectrically providing a timer to indicate a time to complete atransaction, where the time can be different for different dealers. 19.The method of claim 18, further comprising: placing new issue securitieson the calendar prior to pricing.
 20. The method of claim 19, whereindetails of at least one new issue security include at least one ofsecurity name, size of issue, security details, status and one or morelead managers.
 21. The method of claim 20, wherein the status is atleast one of announced, priced, launched and settled.